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Lanka’s economy shrank by record 7.8 percent last year

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(Al Jazeera)Sri Lanka’s crisis-hit economy shrank by a record 7.8 percent last year, official data shows, as the country struggles with its worst financial crisis in seven decades.

The island’s fourth-quarter gross domestic product (GDP) contracted by 12.4 percent, according to the figures released by the state-run census and statistics department on Thursday.Sri Lanka’s growth is expected to shrink by 3 percent this year, Moody’s Investors Service said on Monday but growth is expected to rebound in 2024.

An unprecedented economic crisis sparked huge protests in the island nation, culminating last July when a mob stormed the home of then-President Gotabaya Rajapaksa, forcing him to flee the country and resign.Since then, a new government has worked to repair Sri Lanka’s battered public finances and secure a sorely needed International Monetary Fund (IMF) bailout.

Last year’s contraction – the biggest in the country’s 75 years of independence – compared with 3.5 percent growth in 2021 and a 4.6 percent contraction in 2020 as the coronavirus pandemic hit.It was “caused by the deepening of the economic crisis … frequent power disruptions, shortages in fuel, raw materials, (and) foreign currency”, the census and statistics department said in a statement.

The data showed some improvement in Sri Lanka’s fiscal position with inflation moderating to about 50 percent in February, down from a record high of 69.8 percent in September.President Ranil Wickremesinghe has raised taxes and ended generous subsidies on fuel and electricity to boost government revenue after his predecessor defaulted on Sri Lanka’s $46bn foreign debt last year.

The reforms are a precondition of a $2.9bn rescue package from the IMF, which Sri Lanka expects to finalise next week.But the tax and price hikes have been roundly unpopular, triggering protests and industrial stoppages around the country.

About 40 trade unions warned on Thursday they planned a general strike next week if their demands for concessions on the austerity programme were not met.Sri Lanka aims to announce a debt-restructuring strategy in April and step up talks with commercial creditors ahead of an IMF review of a bailout package in six months, its central bank governor said last week.

Wickremesinghe has said Sri Lanka can expect to remain bankrupt until at least 2026 and insisted his government has no option but to implement the reforms demanded by the IMF.The census and statistics department said the agriculture sector shrank 4.6 percent last year, while industries contracted 16 percent, and services dropped 2 percent from a year earlier.

Sri Lanka’s economy shrank 11.8 percent in the July-September quarter from a year ago, the second-worst quarterly contraction ever for the country.

“These numbers are broadly in line with expectations. In the last three months of 2022, Sri Lanka was hit by very high inflation, fuel shortages and high interest rates,” said Sanjeewa Fernando, senior vice president of research at Asia Securities.

“For the rest of this year, with IMF funds expected, the central bank should be able to keep the currency strengthened, eventually reduce interest rates, and continue to see inflation ease.”



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GMOA warns of trade union action unless govt. urgently resolves critical issues in health sector

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Influx of substandard drugs is of particular concern

The Government Medical Officers’ Association (GMOA) has warned of renewed and intensified trade union action if the government fails to fulfil its promise to resolve the ongoing crisis in the health sector within the next few days.

GMOA Executive Committee member Dr. Prasad Colombage said his association was hopeful that commitments made by the government, including those formally stated by the Minister of Health in Parliament and recorded in the Hansard, would be implemented.

He called for urgent remedial action in view of the influx of substandard medicines into the country, patient deaths linked to such drugs, difficulties faced by doctors in prescribing medicines, and disruptions to patient care services caused by the continued migration of medical professionals. These factors, he warned, had placed patients’ lives at serious risk.

Dr. Colombage said discussions had already been held with all relevant authorities, including the President and the Minister of Health. He expressed hope that swift solutions would be forthcoming based on agreements reached at discussions. However, he cautioned that the GMOA would not hesitate to resort to strong trade union action if tangible progress was not seen in the coming days.

Meanwhile, the Federation of Medical and Civil Rights Professional Associations yesterday (01) handed over a special memorandum to President Anura Kumara Dissanayake, calling for immediate action to resolve the deepening crisis in the health sector.

Federation President, Consultant Dr. Chamal Sanjeewa, said Sri Lanka’s health system was currently facing a severe crisis and had sought an opportunity to hold discussions with the President on the matter.

The memorandum calls for the President’s direct and immediate intervention on several key issues, including the Indo–Sri Lanka health agreement, shortages of essential medicines including cancer drugs, continued allegations surrounding the administration of the Ministry of Health, reported irregularities at the National Hospital, Colombo, and the absence of an internationally accredited quality control laboratory for the National Medicines Regulatory Authority to test medicines. The Federation has also requested a meeting with the President to discuss these concerns in detail.

By Sujeewa Thathsara ✍️

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Elephant census urged as death toll nears 400

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Sri Lanka’s latest elephant census must result in immediate policy action, not remain a paper exercise, Centre for Environmental Justice (CEJ) Managing Director Dilena Pathragoda warned, as nearly 400 wild elephants have already died in 2025 alone amid escalating human–elephant conflict.

With the national elephant population estimated at around 5,879, Pathragoda said the figures would be meaningless unless they shape land-use planning, habitat protection and enforcement.

“As of mid-December, close to 397 elephants have died in 2025, mostly due to shootings, electrocution, train collisions and other human-related causes,” he told The Island. “When deaths continue at this scale, census numbers alone offer little reassurance.”

Official data show that 388 elephants died in 2024, while 2023 recorded a staggering 488 deaths, one of the highest annual tolls on record. Conservationists warn that the trend reflects systemic failure to secure habitats and elephant corridors, despite repeated warnings.

“An elephant census should not end with a headline figure,” Pathragoda said. “If these statistics do not influence development approvals, infrastructure planning and land-use decisions, they fail both elephants and rural communities.”

Elephant populations remain unevenly distributed, with higher densities in the Mahaweli, Eastern and North Western regions, while other areas face sharp declines driven by habitat fragmentation and unplanned development.

Pathragoda said recurring fatalities from gunshots, illegal electric fences, improvised explosive devices along with poisonings  and rail collisions expose the limits of short-term mitigation measures, including ad hoc fencing projects.

“The crisis is not a lack of data, but a lack of political will,” he said, calling for binding conservation policy, transparent environmental assessments and accountability at the highest level.

He urged authorities to treat elephant conservation as a national governance issue, warning that failure to act would only see future censuses record further decline of these majestic animals.

“Elephants are part of Sri Lanka’s natural heritage and economy,” Pathragoda said. “Ignoring these warning signs will come at an irreversible cost.”

By Ifham Nizam ✍️

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CTU raises questions about education reforms

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The Ministry of Education has yet to clarify whether school hours will be extended by 30 minutes from next Monday (05) under the proposed new education reforms, Ceylon Teachers’ Union (CTU) General Secretary Joseph Stalin has said.

Stalin told The Island that the Ministry should reconsider the planned reforms, warning that decisions taken without adequate study and consultation could have serious repercussions for nearly four million schoolchildren.

He said the Education Ministry had announced that education reforms would be implemented in Grades from 1 to Grade 6, but it had not said anything about the Grades above 6. This lack of clarity, he said, had created confusion among teachers, parents and students.

Stalin also noted that although learning modules had been issued, students are required to obtain photocopies based on the codes introduced in these modules. However, the Ministry had not revealed who would bear the additional financial burden arising from those costs, raising further concerns over the practical implementation of the reforms.

by Chaminda Silva ✍️

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